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Insurance

Through extensive resilience and recovery work on drought and natural disasters across Queensland, QFF identified a gap in the risk management tools available to farmers.

Agricultural industry-specific insurance is underdeveloped in Queensland, but it is an exciting prospect for our sector in its ongoing need to better manage risk.

QFF is at the forefront of this new industry. Working with members, the insurance sector and universities we are developing appropriate insurance products and improving the understanding of insurance and its use as a risk management tool.

With crop insurance not available for many agricultural commodities grown in Queensland, projects underway will bridge this gap and bring suitable products to market faster to provide farmers with additional risk management tools.

  • Crop insurance in Australia

    Most Australian farmers have not taken up crop insurance (where available) despite facing some of the greatest weather-related challenges of any developed farming economy. While farmers are generally aware of the potential for crop insurance to be used to manage risk, it has not been widely taken up due to a detrimental cycle of adverse selection, poor results and increasing premium costs.

    Available crop insurance options

      • Single/’named’ peril crop insurance: Most popular crop insurance in Australia. Insurance covers a nominated or named peril (e.g. hail). Limited availability across industries.
      • Multi-peril crop insurance or income protection insurance: Insurance covers all or multiple perils on the farm. A couple of providers in Australia, available for winter cereals.
      • Area yield coverage: Not available to individual growers, but industry or region. Very limited take up in Australia.
      • Weather index-based crop insurance: Very common internationally, limited availability in Australia with only one or two companies offering it commercially to farmers.
  • Drought and Climate Adaptation Program

    Queensland farmers are subject to highly variable climatic conditions, including droughts and floods, which can decimate production and challenge farm viability. Insurance could play an important role in helping Queensland farmers manage their climate risk. However, the use of insurance to manage climate-related production risk is currently poorly understood and utilised by farmers.

    Funded by the Queensland Government, the project conducted focused reviews on climate risk in agriculture and how insurance products could be used to address these risks. Based on these reviews, prototype insurance products have been developed to manage these identifiable climate and weather risks for farmers.

    The project is currently developing industry-specific case study examples of how the product works and pricing it up.

  • Insurance data project

    The objective of this project was to improve the understanding of agricultural insurance and assist with the initial development of new products that met Queensland farmers’ needs through the provision of data, education and extension.

    The project demonstrated that the initial development of an insurance product was possible with quality base level data and agricultural industry support.

    The work conducted in this area is predicted to have flow-on effects in strengthening partnerships with the insurance sector and individual agri-focussed companies.

    Specifically, the project undertook:

    • Industry and farm data collection in the Queensland stone fruit industry;
    • Risk identification and risk management information for the Queensland stone fruit industry;
    • Industry and farm data collection in the Queensland summer grains industry;
    • Risk identification and risk management information for the Queensland summer grains industry;
    • Educational presentations to farming industry organisations and farmers about agricultural insurance; and
    • Providing risk identification and management information provided to the insurance sector.
Austchilli Group director Trent De Paoli
Over the last decade, I’ve seen too many young people leave the farm due to extreme weather events. They don’t have a lot of equity behind them, so with a significant weather event, it’s all over.

Cyclone Insurance - Closer than you think

Data collection

Weather analysis

Risk identification

Product development

Testing & validation

Report of suitability

Education